Authorization is an act of Congress which permits a federal program or activity to begin or continue from year to year. It sets limits on funds that can be appropriated, but does not grant funding which must be provided by a separate congressional appropriation.

An Appropriation is an authorization by an act of Congress that permits Federal agencies to incur obligations and make payments from the Treasury. An appropriation usually follows enactment of authorizing legislation. An appropriation act is the most common means of providing Budget Authority (BA). Appropriations do not represent cash actually set aside in the Treasury; they represent limitations of amounts which agencies may obligate during a specified time period. See Appropriation Categories

National Defense Authorization/Appropriations Act
The annual National Defense Authorization Act gives a program its right to exist. However, only after the president signs the Defense Appropriations Act does the program have budget authority. To execute an acquisition program, budget authority provided by Congress is needed in order to incur obligations and make payments.

31 U.S.C. 1301(a)
Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.

Period of Availability
By law, 31 U.S.C. 1551-1557, appropriations are available for limited periods. An agency must incur a legal obligation to pay money within an appropriation’s period of availability. If an agency fails to obligate funds before they expire, they are no longer available for new obligations (e.g., issuance of a new/basic funding document, awarding a new contract, etc.). Appropriations Acts specify time period for availability for new obligations. Differences in time periods reflect Congressional understanding of various timeframes to accomplish work. Expired funds retain their “fiscal year identity” for five years after the end of the period of availability for new obligations. During this time, the funds are available to adjust existing obligations or to liquidate prior valid obligations. Closed Appropriations are no longer available for any purpose. An appropriation becomes “closed” five years after the end of its period of availability as defined by the applicable Appropriations Act.

Annual appropriations: available for incurring new obligations only during one fiscal year specified in the Appropriations Act. In fact the DoD FMR Volume 4 Chapter 5 (050402) states: “In the absence of specific legal authority, DoD Components are not authorized to incur obligations using operation and maintenance appropriations for goods and services to be provided in future years.”

Operations and Maintenance (O&M) funds = 1 Year

Military Personnel (MILPERS) = 1 Year

Multiple-year appropriations: available for incurring new obligations for a definite period in excess of one fiscal year.

Research and Development (R&D) = 2 Years

Military Construction (MILCON) = 5 Years

Authorization Process
The House Armed Services Committee (HASC) and Senate Armed Services Committee (SASC) hearings begin after the President’s State of the Union Message. The initial “posture” hearings are conducted with the most senior members of the executive branch, DoD and the Services discussing and defending the programs in the PB. Follow-on hearings will go on for several months, delving into a variety of issues concerning particularly political or sensitive aspects of the budget.

The HASC will normally be the first to complete its review of the budget. After mark-up sessions in which committee members (and staffers) conduct a line-by-line review of the PB, the HASC and SASC will each send their own version of the Authorization Bill to the floor of their respective chambers. On the floor, the proposed bill will be debated, possibly amended and finally approved. Assuming there are differences between the House and Senate versions (which is normal), a conference will be convened to discuss and resolve those differences. After any differences have been resolved and the bill passed in identical form by both the full House and full Senate, it becomes an Act and is sent to the President for signature to become law.

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